%1

The trustee overseeing the bankruptcy of a Massachusetts pharmacy linked to a 2012 meningitis outbreak that killed 64 people filed a plan that would set aside at least $135 million to compensate victims and their families, Reuters reported yesterday. The plan was filed after a federal bankruptcy court in July approved a deal to settle scores of lawsuits against New England Compounding Center (NECC). NECC shut down in October 2012 after authorities linked it to the worst outbreak of fungal meningitis in U.S. history due to drugs it shipped to health providers across the country. The company filed for bankruptcy two months later. Owners of NECC, which produced a tainted steroid that sickened more than 700 people in 20 states, have already contributed nearly $50 million to the NECC estate for eventual distribution and are expected to contribute additional sums through tax refunds and the sale of a related business.

John Altorelli, co-chair of the U.S. finance practice at DLA Piper in New York, has become at least the third former Dewey & LeBoeuf partner to file for personal bankruptcy protection, the American Lawyer reported today. The chapter 7 filing by Altorelli in Bridgeport, Conn., on Nov. 25 comes after a recent ruling in Dewey’s own bankruptcy case precluding ex-partners from invoking a key defense against clawback claims by the defunct firm’s liquidating trustee. On Oct. 30, U.S. Bankruptcy Judge Martin Glenn ruled that ex-Dewey partners like Altorelli could not invoke the “value” defense in fighting claims filed by Diamond as he oversees the liquidation of Dewey’s estate.

A Caesars Entertainment Corp. creditor group said managers should be stripped of control of the casino company’s operating unit because they looted the subsidiary of billions of dollars in assets, Bloomberg News reported on Thursday. UMB Bank, trustee for first-lien noteholders owed about $1.25 billion, sued Caesars yesterday in Delaware Chancery Court, repeating allegations made by junior creditors in August. Yesterday’s suit, the first by senior creditors, came after some had agreed on the outline of a debt restructuring plan for the operating unit. The first-lien creditors yesterday asked the court to appoint a receiver for the unit.

The former owners of Lake Las Vegas, including two of Texas’ billionaire Bass brothers, paid $115 million last month to quietly settle a long-running lawsuit tied to the luxurious golf community and resort’s collapse into bankruptcy in 2008, the Wall Street Journal reported today. The lawsuit was brought by Larry Lattig, a court-appointed bankruptcy trustee, who sued the initial backers of Lake Las Vegas for the $470 million they took out of the project — a 3,600-acre resort community centered on a man-made lake about 20 miles from the Las Vegas Strip — before it tumbled into bankruptcy. The ex-owners — billionaire brothers Sid and Lee Bass and the estate of the late California developer Ron Boeddeker — were able to cash out of their investments in the resort community, due to a syndicated loan arranged by Credit Suisse Group. The Credit Suisse loan was similar to a home-equity loan, allowing the resort’s backers to cash out their investments. The Swiss bank later marketed similar loans to a number of other owners of western luxury resorts — including Yellowstone Club in Montana, the Promontory Club in Utah and the Tamarack Resort in Idaho — that eventually ended up going bust when property values cratered.

Creditors of failed smartphone screen material supplier GT Advanced Technologies will get a peek at Apple Inc.'s secrets under a protective court order signed yesterday, the Wall Street Journal reported today. Apple is handing over documents and submitting to questions in advance of a planned December court review of a proposed settlement with GT, which would clear Apple of allegations it is to blame for GT’s bankruptcy. The information exchange is under wraps, but anything creditors seize on as grounds to challenge Apple’s deal with GT will have to meet strict standards to justify the secrecy, Bankruptcy Judge Henry Boroff warned the companies at a hearing yesterday.

Customers of Mt. Gox, once the world’s largest Bitcoin exchange, are closer to getting back at least some of the money they lost this year when it shut down and announced that their funds had gone missing, New York Times DealBook reported today. The bankruptcy trustee for Mt. Gox, which is based in Tokyo, announced today that it would work with a California-based Bitcoin exchange, Kraken, to return the money left in the estate to the company’s 127,000 creditors. Jesse Powell, Kraken’s chief executive, said that his company would help with the claims process, including evaluating the assets owed to creditors, and that it would assist in the investigation of Mt. Gox’s collapse. He said that the trustee would have the final decision on payments in Bitcoin.

A federal judge has accepted a compromise between bankrupt Great Northern Paper and its creditors that sets aside a portion of the expected receipts from the sale of the East Millinocket, Maine-based mill for dozens of unsecured creditors, the Portland Press Herald reported on Saturday. In a ruling filed on Friday at U.S. District Court, Judge Louis H. Kornreich approved a proposal to remove liens from Great Northern Paper’s assets so a sale of the defunct paper mill can go ahead. A “carve out” from the proceeds of the sale will provide funds to the company’s unsecured creditors, including many businesses in the Katahdin region that were never paid for goods and services. Collectively, they are owed $22.6 million.

The Archdiocese of St. Paul and Minneapolis (Minn.) reported a $9.1 million operating deficit for fiscal year 2014 and reiterated Thursday that it's considering filing for bankruptcy because of the potential for more lawsuits by victims of clergy sexual abuse, the St. Paul Pioneer Press reported today. The archdiocese released its financial information in its newspaper, the Catholic Spirit, more than a week after it said it was cutting its central office budget by 20 percent, including 11 jobs. The archdiocese said its operating deficit can be partly attributed to $4.1 million spent to address allegations of clergy sexual abuse since May 2013, when a three-year window opened for abuse victims to file claims that were otherwise barred under the statute of limitations. The archdiocese's chief financial officer, Thomas Mertens, said that outside professionals were brought in and that most expenses were related to a review of priest files, investigation of insurance coverage and analysis of financial options. Nienstedt said that since the statute of limitations was lifted, the archdiocese has settled two cases and 20 trials are scheduled. Victims of past abuse still have about 18 months to pursue litigation.

Robert Keach, the bankruptcy trustee in the Montreal, Maine and Atlantic Railway case, is casting a wide net in an effort to reach into deep corporate pockets to create a fund to compensate victims and help pay the enormous costs related to the Lac-Megantic rail disaster in Quebec last year, the Bangor (Maine) Daily News reported today. In September, Keach asked a bankruptcy judge to order nine international companies to turn over all documents that discuss the sale of crude oil obtained from the Bakken Foundation in North Dakota, then shipped by truck and rail into and across Canada. The motion, granted yesterday by Bankruptcy Judge Louis Kornreich, compels ConocoPhillips, Shell Trading U.S. Co., Arrow Midstream Holdings LLC, Enersrco Energy LLC, InCorr Energy Group LLC, Marathon Oil Corp., Oasis Petroleum Inc. and QEP Resources Inc. to turn documents over to the trustee. Keach has asked for any and all communications between the companies to and from the World Services group that owned the oil that was being shipped when the train crashed. Those companies include World Fuel Services Corp.; World Fuel Services Inc.; Western Petroleum Co.; World Fuel Services, Canada, Inc.; and Petroleum Transport Solution Inc. Western Petroleum leased the train cars.

Creditors of GT Advanced Technologies complained in a bankruptcy court filing that the sapphire company may have gotten too little in its proposed settlement with Apple Inc. over legal claims stemming from a deal to supply sapphire screens, Reuters reported yesterday. GT Advanced's chief operating officer has said in court papers that the iPhone maker pulled a "bait and switch" to force the sapphire maker into a money-losing deal in 2013. GT Advanced shocked investors by filing for bankruptcy in October in a case that was initially shrouded in secrecy due to a confidentiality agreements with Apple. After the bankruptcy filing, Apple agreed to release GT Advanced from the deal and allow it to sell more than 2,000 sapphire furnaces located in Mesa, Arizona. The agreement needs approval by U.S. Bankruptcy Court Judge Henry Boroff, who has been hearing the chapter 11 case in Springfield, Mass.